Friday, September 22, 2017

On Friday, September 22, 2017, after market close, CMS issued PAMA data (covering the whole lab fee schedule) and also issued its proposed rates for new CY2018 codes. The data is voluminous and this opens a public comment period through October 23, 2017.

CROSSWALK NEW CODE PRICING PROPOSALS

The home page for the Clin Lab Fee Schedule New Code Crosswalk/Gapfill process is here.

I've posted a "rough" table of all crosswalks in Excel in the cloud, here.

Note that from page 32 forward, this PDF includes pricing for codes that received no (or "too little") PAMA data.

For example, Genome 81425 is proposed is proposed to be priced on a crosswalk from "5-50 tumor genes" (81445, about $600) which sounds too low and is much lower than the PAMA price of Exome 81415 (see below).

There are many strange things in the crosswalk recommendations.

For one example, nearly all stakeholders recommended crosswalking the new Mammaprint code 81521 to the Oncotype DX code 81519, but CMS chooses a crosswalk to Cologuard (about $500) because CMS states that it sees the Cologuard test as "more similar" to Mammaprint than Oncotype is.

The gapfill process virtually disappeared. (It shows up on one code, 0001U).

The Myriad Prolaris test 81541 received a proposed crosswalk to the Cologuard price (81528, about $500).

However, that is only a proposed price and in the past CMS proposed low prices for MAAA tests then backed off to more reasonable crosswalks or to gapfills. In addition, while Prolaris is an important future product, it is currently a negligible amount of total Myriad sales.

Several experts I surveyed all agreed that new crosswalks will FLOAT up or down based on the behavior of the target code under PAMA.

For example, if NEWCODE 80001 is crosswalked to OLDCODE 80002, and OLDCODE will fall from $5 to $2 in steps of $4, $3, $2 over the next 3 years, then so will NEWCODE.

The price of 50+ tumor genes (81455) was previously unpriced at CMS, but now has a new price of $2919. More than 10 labs reported this code, but only a total of 182 times.

The price of BRCA testing under legacy codes 81211, 81213 went up a little (from $2195 to $2395 for the first, +200, from $586 to $553 for the second, -33).

However, the price for consolidated BRCA testing in one code (81162) went down from $2503 to $1616.

The testing of a known BRCA familial variant rose from $93 to $375 (81215 or 81217).

Cystic fibrosis codes were never priced by Medicare. They get pricing under PAMA. 81220 is CF gene, common variants, $557; 81221 is familial variant, $97; 81222 is DupDel variants, $435, and 81224 is intron analysis for infertility, $169. In a strange rank-order anomaly, CF full sequencing 81223 is cheaper $499 than is common variants 81240 $557.

81220 had 142,145 uses (in 6 months); 81223 had 13,000 uses (in 6 months). While the median and new CLFS price of 81220 is $577, there were 3,161 cases of 81220 paid over $3000.

CYP variants at 81225, 81226, 81227 did not change much at all under PAMA: respectively being [$293, 291], [$454, $450], and [$176, $174]. Total cases in six months for 81225 were 33,354 cases.

But again, the raw data is interesting. While the median price of CYP2C19 was just $291, there were 583 cases paid over $5000, and 164 cases paid at $46,827.

Put another way, someone could have bought 583 tests at the median price of $291 for $169,653, and billed them back to insurers at recorded actual top transaction prices for 583 tests, reaping $17,832,755.

That's a multiple of 100X - pharma price-gouging territory.

For comparison, that transaction on 583 tests could in a day reap half as much as the annual revenue of the CareDx company, which has a market cap of $92M.

We noted that the highest private payer prices on cystic fibrosis germline testing were about 8X the median, whereas the highest private payer prices on CYP testing rose to 100X the median.

In new crosswalk, rather than PAMA data, three new CYP codes for 2018 are all proposed as crosswalks to the cheapest of the three current CYP code (81227, $174).

The new 2018 pharmacogenetic codes are 81230 CYP3A4, 81231 CYP3A5, and 81232 DPYD for 5FU metabolism.

Genomic Sequencing Procedure (GSP) Codes:

Some unbelievable prices appear in the Genomic Sequencing Procedures or GSP codes.

I've put an informal table of all GSP codes, old price points (if available), and new PAMA prices or newly proposed crosswalk prices in the cloud here or in a web table here.

See Paired Bar Chart at bottom of blog for 2017 and PAMA GSP prices.

81432 Hereditary Breast Cancel Panel (which includes BRCA1, BRCA2, and a dozen more genes) went down from$932 to $136. The sister code for Dup Del analysis, 81433, went from $602 to $425.

If you go to the raw data website, and search for 81432, there is no data. This may mean that no lab reported more than 10 cases (?).

The AMA definition of 81432 in 2017 required 14 genes, but beginning in 2018, the AMA definition of 81432 includes is easier to reach, requiring only 10 genes.

Incredibly, the code for Lynch Syndrome 81435, went from $802 to $38 (and its dup del code 81436, from $802 to $574). For 81435, again, the raw-data website has no data although Lynch syndrome panel testing is a very common service.

Hint: The GSP panel codes were not very popular and gene by gene stack coding was more commonly used.

BRCA codes for BRCA-1-only and BRCA-2-only also dropped through the floor.

While BRCA 1-2 sequencing plus common dup-del rose from $2195 to $2395 under PAMA, the pricing for BRCA-1sequencing and common dup-del alone (81214) fell to a PAMA price of $74.95 and BRCA-2 sequencing alone (81216) fell to $185.12. These add to $260.07, drastically less than the their rollup into 81211 $2395. On the other hand, full sequencing plus dup del (81211+81213) rolled up as one code 81162 falls to $1615.

Another way of saying this is that full sequencing of BRCA1-2, common dup del, and uncommon dup del, could be equally billed as:

81211+81213 = $2395+$553 = $2948

81162 = $1615.

81214+81216+81213 = $75+$185+553 = $813.

Note that 81162, the simplest code, can be decomposed into either 2 codes (much higher price) or 3 codes (much lower price).

81445 (tumor, 5-50 genes) and 81455 (tumor, 51+ genes) were only reported in 1H2016 with 294 and 182 uses, respectively, for all commercial payers in the USA, suggesting very low use of these panels vis-a-vis reporting tumor panels by using each tumor gene coded by name.

Some GSPs rose.

Noonan Spectrum Disorders 81442 from $602 to $2143.

1 claim line for 81442 was reported.

Ashkenazi disorders panel 81412 rose from $602 to $2448.

This quadrupling in price for 81412 was based on 269 reported prices, of which 66% were >$2000. 15% were > $3300 and 10% were < $1000. The two most common price points were $2448.56 and $4405.77, each with about 28 cases or about 10% of the total of 269 cases.

Mitochondrial gene panel (not previously priced by CMS) will be 81440, $3324. This is an example of many genetic codes never priced by CMS that receive CLFS pricing through PAMA.

Exome 81415 came out fairly well at $4780. But oddly, 81415, exome comparator genome, is three times as much at $12,000.

Genome 81425 did not have pricing data, according to CMS, so CMS proposed a crosswalk price of about $600 based on crosswalk to code 81445 (tumor, 5-50 genes).

Sole Source Tests

Among sole-source tests, Oncotype DX 81519 rises from $3443 to $3873, and the Allomap cardiac transplant test 81595 from $2840 to $3240.

85048 auto leukocyte count pays better - even after dropping from $3.48 to $1.60."Raw Data" Website - Big Insights into National Test Utilization
The raw data website is here. For a separate blog focused on the raw-data website, here.

For example. The raw data website tells us that BRCA Sequencing, 81211, was reported 94,977 times, and that the most common single price point was $1870, which was reported 10,111 times. The consolidated BRCA code 81162 (which covers the performance of both sequencing and dup del in one code) was reported only 815 times (about 1% as often), and while the median price was lower at $1616 the most commonly reported price for 81162 was $2400 with 33 occurrences. If BRCA 81211 was used 94,977 times in this PAMA data, that is for 1H2016, so the full year usage in commercial payers was likely circa 190,000.

The raw data website doesn't tell you the number of labs reporting, but gives you the number of times a particular price was reported. For example, a lab might bill at test at $10 and be paid $8, $8.50, and $9. It would report, and we would see on the raw data, $8x1, $8.50x1, and $9x1, so we would deduce that the utilization was 3.MoPath Tier 2 Codes

While Tier 2 codes did not have CLFS prices before, they did have average observed Pt B prices. PAMA prices are noisy, but on average 6% lower.

Highest Price Molecular Codes (Sorted by High PAMA Price)

See table, click to enlarge:

PLA Code Recommendations

The July crosswalk/gapfill meeting was the first time CMS has priced PLA codes, the new Proprietary Lab Analysis codes being released quarterly by the AMA.

There are over a dozen new PLA codes included in the recommendations, most receiving a crosswalk rather than a gapfill recommendation. However, some of the recommendations make no sense, at least comparatively.

This is in contrast to the result for 0008U, an H.pylori gene-resistance panel, which CMS offers to crosswalk to 81445 (5-50 tumor genes, about $600).

Impact of New PAMA Prices on Incoming Crosswalks

CMS faces what to do with codes that are currently being crosswalked to codes whose prices may change radically under PAMA. For example, CMS recommends the new code 81413 (cardiac ion channelopathies) be crosswalked to Lynch syndrome 81435. However, Lynch syndrome 81435 will be dropping from about $600 to about $38 under current PAMA data. Where does that leave 81413? CMS remarks, "Maintain the crosswalk finalized in November 2016" but I'm not sure if that means the November 2016 price of that crosswalk or the new $38 price of the crosswalk. (See page 29 of the 51-page crosswalk/gapfill PDF).

In the chart below, 81416 Exome Comparator $12,000 is omitted to preserve the vertical axis.
Blue lines are current prices, Green lines are new PAMA prices.

The chart below is a dot plot of current 2017 prices for GSP's on the x-axis versus 2018 PAMA prices on the y-axis. The red line is equal pricing under 2017 CLFS and PAMA.

For example, 81455 had "0" price in 2017 (x=0) and $2995 in PAMA (y=2995).

The chart below shows the relationship (or lack of one) between GSP panel gene count on the x-asix and PAMA price on the y-axis. For example, the 9-gene Ashkenazi panel is $2448 (x=9, y=2448) and the 10-gene Lynch panel is $38 (x=10, y=38).

About the Author

Bruce Quinn MD PhD is an expert on health reform, innovation, and Medicare policy. He helps both large and small companies understand and overcome hurdles to commercialization, as well as craft business strategies for a changing environment. CONTACT Dr. Quinn through www.brucequinn.com. BACKGROUND: Dr. Quinn has worked in academic medicine, Accenture business strategies, and for the Medicare program. EDUCATION: Stanford MD/PhD, MIT Postdoc, Kellogg MBA.